KOLKATA: Online smartphones sales went flat last year after a three-year surge, reviving spirits in the brick-and-mortar trade. On top of that, ecommerce sites failed to make any significant headway in white goods such as refrigerators and air conditioners despite online marketplaces trying hard to make a dent in the segment.

Hong Kong-based market tracker Counterpoint Research said the share of online sales of smartphones grew just a percentage point to 32% of the overall market in 2016. In contrast, this had doubled in 2014 and 2013. The reason for this was the end of heavy discounting after the government issued norms for online marketplaces to maintain a level playing field. Also, brands set uniform pricing norms across online and offline sales, betting on an omni-channel strategy.

"There are virtually no price differences for popular smartphones between online and offline. Hence, offline contribution of smartphones is now going to grow again,” said cellphone retail chain Hotspot’s director Subhasish Mohanty.

Shubhodip Pal, chief operating officer at online exclusive smartphone brand Yu Mobiles, said online sales weren’t spared the demonetisation effect in November and December as it hit the cash-on-delivery mode of payment. Yu Mobiles is owned by Micromax.

"During the demonetisation phase consumers were cautious to spend due to non-availability of cash. However, an increased impetus on cashless economy aligned towards digital India will boost online sales,” Manish Sharma, CEO, Panasonic India. The market share of online sales in household appliances grew to just 7.7% last year from 6.6% in 2015, according to data from researcher Euromonitor International. This is despite several online exclusive appliance brands charging 20-30% less than comparable products available in stores.

Videocon chief operating officer CM Singh said small appliances and microwave ovens have been able to crack the online market but consumers still prefer touch and feel when they want to buy a refrigerator, washing machine or air-conditioner. "There have been high return rates for these products online due to mishandling since transporting them is a challenge,” he said.

CHINESE PHONES ALSO MOVING OFFLINECounterpoint Research analysts said Chinese smartphone brands like Motorola, Xiaomi, Lenovo, LeEco entered India through online sales, which was followed by discount-driven branding activities across Flipkart, Snapdeal and Amazon, which had helped the ecommerce channel to grow significantly. But they are moving into offline retail as well, reflecting market trends.

"The online exclusive brands have started to invest in offline retail operations reducing the online traction. Also, the number of new smartphone brands entering the Indian market has reduced over the years and we are expecting this trend to continue,” said Counterpoint senior analyst Pavel Naiya.

Amazon India, however, said its business did not lose any momentum with smartphone sales rising by 150% last year and large appliances by 200%. "Last year we built upon our earlier partnerships with brands and added more brands onto Amazon. For large appliances, we have set up dedicated fulfilment centres,” said Manish Tiwary, vice president, category management. Euromonitor said many online retailers are incurring losses after offering heavy discounts on consumer electronics and it will be difficult to maintain them. "It remains to be seen if consumers will continue to shop online once online retailers reduce the level of discounts,” it said.

Meanwhile, brick-and-mortar stores are offering attractive discounts in some instances, as a laptop buyer discovered.

"I bought a Dell Inspiron (5568) from Reliance Digital on Thursday for Rs 63,999 while on Amazon the price was Rs 76,683. I got a Dell bag and an all-inone Canon printer for free with the laptop which was not there on Amazon,” said JK Rajan, an independent consultant at German firm TUV.

Sponsored Stories

Subscribe to our Newsletters

The move is expected to give Domino's an edge over rival pizza brands and QSR chains, but some experts warned that it may prove to be a tough promise to live up to and raised concern that it would put unnecessary pressure on delivery boys.